The secret truth behind public sector pensions

Cliff D'Arcy
by Lovemoney Staff Cliff D'Arcy on 15 December 2011  |  Comments 52 comments

After the recent strike, we show how some government workers enjoy obscene pensions!

The secret truth behind public sector pensions

Since the General Election of May 2010, there has been growing ill-feeling between public sector workers and the coalition government.

The government's headache is that, under the last Labour government, the public payroll increased by nearly a million workers to exceed six million employees. What's more, with the shortfall between government spending and tax revenues predicted to reach £127 billion in 2011/12, the coalition has no option but to prune public sector pay.

Pricey pensions

In order to curb the cost of the public sector, the government plans to cut its workforce by 440,000 workers during this parliament. In addition, it is freezing the pay of higher-paid public-sector workers until 2012/13.

Furthermore, the government is worried about the spiralling cost of paying generous, final-salary pensions to current employees and retired workers. Thanks to longer lifespans and falling investment returns, the cost of providing these gold-plated pensions has exploded.

In order to provide guaranteed pensions based on salary and length of service, final-salary pensions require yearly contributions of up to 30% of pay. As a result, the vast majority of private sector employers have closed down their final-salary pension schemes.

Pensions apartheid

Today, the UK has 29 million workers: 23 million working in the private sector and six million working in the public sector.

Then again, while nearly four-fifths (79%) of workers are in the private sector, almost seven-tenths (70%) of those with final-salary pensions work in the public sector. Thus, in an independent review of public-sector pensions, Lord Hutton warned that this public-private pensions apartheid was "fundamentally unfair".

In order to curb the cost of providing generous pensions to government workers, the coalition has proposed a number of changes to future pension entitlements. These include:

  1. bringing normal retirement ages for public-sector workers into line with the State Pension;
  2. paying pensions based on career-average earnings, rather than final salaries;
  3. basing future pension uplifts on the Consumer Prices Index (CPI) measure of inflation, rather than the higher Retail Prices Index (RPI); and
  4. requiring members to pay higher contributions.

Following the breakdown of negotiations between the government and trade unions, public sector workers went on strike last month in the biggest day of industrial action since the late Seventies.

Who pays what?

We've heard many arguments for and against public sector pensions, but what do the numbers tell us? When it comes to funding these schemes, who pays what?

Take a look at my first table, which shows contribution rates for four major public sector pension schemes:

Pension

scheme

Member

pays*

Taxpayer

pays

Total

Retire at

Teachers

6.4%

14.1%

20.5%

60-65

Civil Service

1.5%

18.9%

20.4%

60-65

Armed Forces

Nil

29.4%

29.4%

55

Judges

1.8%

32.2%

34.0%

65

* These are members' gross contributions, which will be reduced by tax relief of 20% to 50%.

As you can see, teachers pay 6.4% of their before-tax salary into their pension scheme and taxpayers contribute 14.1%, for a total of 20.5%. These are broadly in line with the contribution rates into similar private-sector schemes. However, civil servants pay a mere 1.5% of pay into their pensions, with taxpayers contributing 18.9%.

The Armed Forces pay nothing into their pensions, with all 29.4% of pay coming directly from taxpayers. However, given that our servicemen and women must put their lives on the line in hostile conditions, often for low pay, I would argue that those who serve also deserve decent pensions!

Finally, the pension scheme for Britain's judges is obscenely generous. Members of the judiciary pay in 1.8% of salary, while taxpayers contribute a further 32.2%.

Another question worth answering is: for every £1 members pay in, how much do taxpayers contribute? My second table answers this question:

Armed Forces

Completely funded

by taxpayers

Teachers

£2.20

Civil Service

£12.60

Judges

£17.86

As you can see, for every £1 teachers contribute, taxpayers add £2.20. Civil servants pay in £1 and get another £12.60 from taxpayers. Lastly, the contribution from taxpayers is nearly 18 times that from judges. Surely you're joking, Mr Justice?

Higher contributions from members

In summary, some public sector pension schemes are much more generous than others. Even so, for all of these schemes to remain sustainable in the long term, contribution rates must rise across the board.

While teachers could pay an extra 2% of pay a year into their pensions, my view is that civil servants and judges should shoulder much steeper rises in their contribution rates.

With Britain's national debt rising by more than £10 billion a month, it seems ridiculous that some privileged public sector workers can get away with paying under 2% a year, while taxpayers fund almost all of their copper-bottomed pensions!

More: Start saving for a rainy day | Five broadband rip-offs! | UK house prices have yet to crash

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Comments (52)

  • ECLKWRIG
    Love rating 33
    ECLKWRIG said

    The article has either conveniently, or absent-mindedly omitted details for local government staff. I currently work for a large university and have been contributing to the Local Government Pension Scheme for in excess of 33 years. Successive governments have attacked my pensions entitlement, breaching the contract I thought I had entered into. Throughout those 33 years, I have NEVER received a pay rise above inflation, so my existing low pay gets worse, year on year - given the "low pay" argument mentioned in terms of Armed Forces personnel, could I request a similar arrangement whereby I no longer have to contribute to my pension ?

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  • caketh54
    Love rating 14
    caketh54 said

    Talk about a biased report. Just put in the ones which are obscene. No one should not contribute to their own pension scheme and yet there are ones in the private sector who have also been in this position. It is the EMPLOYER not the tax payer who contributes to local government pension schemes as well as the employee as they do in all sectors - or should. These payments are effectively deferred pay. The MAJORITY of staff in local government weren't on brilliant pay even before two years of pay freeze, then a pay cut and now another two years of a maximum 1% rise per year amidst spiralling inflation. Also the majority of LG employees contribute a fair bit more than 6.4% since the last time LG pensions were attacked and their retirement age has been the same as the state pension since it changed, except with LG it happened overnight and didn't have a 5 year phase in.

    The private sector should be looking at ways of improving their pension schemes instead of having a go at the people who were willing to fight for theirs.

    Are MPs pensions going to be affected? Are their retirement ages going to change? Are they going to be stopped from smoking in a public building (House of Commons)?

    Attack the right people - the MPS - rather than assist them in trying to divide the people in order to conquer them!

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  • Angie Bower
    Love rating 0
    Angie Bower said

    A well argued summary but with some flaws. In the media/union debate no-one has really differentiated between the individual contributions and benefits of the various components of 'Public Servants', whereas your example shows that their contributions are all widely different.

    However, it is not only the Armed Forces who put their lives on the line. Some Civil Servants serve alongside the Armed Forces in conflict zones so how do you differentiate between them for their well deserved pension?

    Another point to consider is how much tax do Judges and Civil Servants pay? It could be argued that for every Civil Servant paying 40% tax their indirect pension contribution is double that of lower paid workers.

    Having said that, what the government should be trying to do is bring all Public Servant pensions in line. By all means raise the contributions for Judges, after all they just sit there and fail to hand out harsh punishment to villains.

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  • SimonFin
    Love rating 10
    SimonFin said

    What an incredibly badly written piece of rubbish. Making claims that "the cost of providing these gold-plated pensions has exploded" and that "taxpayers fund almost all of their copper-bottomed pensions". If you had actually done your research you would see that the pension paid out to many people in the public sector is lower than those in the private sector. As for the costs exploding - the natioanal audit office produced two graphs, one that David Cameron likes to show people, showing the cost of public sector pensions going up year on year, to over 90 billion in 2060. However, the second graph produced, which accounts for inflation and clearly shows a modest increase in the cost of the pensions relative to GDP, to a maximum of 2% from the current 1.6% in 2020, then decreasing to below the current level, clearly shows that any arguement that the cost is exploding is utter rubbish, spouted by people with a political axe to grind.

    You seem determined to continue the race to the bottom, with everyone on the lowest possible pension for both public and private sector workers. Even Lord Hutton said this was a bad idea, but I notice you`ve not cherry picked that particular comment. Private sector pensions have been moved from final salary schemes while the profitability of the companies has increased - how is that fair? We should be pushing for everyone to get a good pension entitlement, not for everyone to be poor in retirement.

    For shame Cliff, and for shame LoveMoney, for producing such a bad piece of journalism!

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  • trav1
    Love rating 5
    trav1 said

    Of course new entrants to the civil service have been paying 3.5% for ages now but why let the facts get in the way of a good rant. Funny, I don't recall the private sector clambering to make sure the public sector kept up with its pay and benefits during the good years, but as soon as things turn round for a bit we have to make sure the public sectior is dragged down to its level. The pension changes represent a public sector tax, nothing else - how else can be it be described as if the money's going straight into the exchequer, rather than to support the pensions themselves? You may as well introduce a tax for everyone working in sports shops. It'd be just about as fair. Most public sector pensions were voluntarily reformed over the past few years to make them sustainable (in terms of holding the % of GDP they cost at the same level - a reasonable definition of sustainable I'd suggest), and most public sector workers understood and went along with that, which is why there weren't any real disputes at the time - I'll bet they're wondering why they bothered. And if you think you're sitting pretty in the private sector, who do you think will be next in line once the public sector's been fleeced?

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  • ajs444
    Love rating 2
    ajs444 said

    Just cherrypick the ones that make the headlines, do not mention Firefighters who 10 years ago were paying 11% into their pension. Do not mention what the retired bankers are raking in, yeah the ones that caused this mess, have a look at the financial services pension pots, then write an article on that.

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  • kittykatt
    Love rating 12
    kittykatt said

    I would like to redress the balance of this article a little and add that many public sector workers are very lowly paid and their pensions are also very low. I worked for the public sector for many years until I left three years ago, contributed to the pension fund all the time I was employed, and my predicted pension will be just under £1,500 a YEAR! (Yes, I have got the decimal point in the right place, it works out at about £125 a month!) I would hardly call that obscenely generous.

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  • b_fusion
    Love rating 5
    b_fusion said

    I would like to point out that public sector workers pay taxes too and so are also part of the body of taxpayers paying for those pensions ie their own.

    I work in the private sector and think it's incredible that private and public sector workers are being pitched against one another, rather than joining together to say we all deserve decent pensions, if we work hard and pay into them all our lives.

    Why are we determined to encourage the worst possible pensions, as if that's what everyone should get? Why not aim for the best? It's like arguing that since slavery still exists, why should anyone get a salary.

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  • julz15
    Love rating 2
    julz15 said

    Thank you Kittykat for pointing out the ACTUAL truth. We do not pay 1.5%, we pay 3.5% and that is increasing by 1.5% to 4.7%, while we are on a 4 year pay freeze. The real civil service workers (not Directors) are, as Kittykat said, very lowly paid, I would just like to get that point across since the media likes to falsely make out that we are all richly paid.

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  • Mike10613
    Love rating 626
    Mike10613 said

    The government prints money and thus devalues it, by the time people actually get their pension it has been devalued. A pension based on final salary seems fair but that will be eroded with time and inflation. We can't believe a word Herr Hutton says either. Maybe all pay and pensions should be pegged to what MP's get? Everyone could get the same expenses too and free holidays.

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  • Salfordguy
    Love rating 22
    Salfordguy said

    THIS IS A SHOCKINGLY BIASED ARTICLE AND SHOULD BE REMOVED. IS THE AUTHOR BEING PAID BY THE TORY LED GOVERNMENT??! I am a university administrator and I contribute to my pension. It is not the taxpayer who pays a contribution but the EMPLOYER!! Pensions are not GOLD PLATED as you state!! the average pension is little over £6k a year for members of my union UNISON. I agree that civil servants should pay a third like myself but why should armed services be exempt?? They chose to join the armed forces! why should "the taxpayer" as you state pay all their contributions!! We have already moved to CPI with no consultation whatsoever! eroding pensions by 15%. The stark fact is that if pension contributions increase people wont be able to afford them and withdraw from the scheme and think sod it I will rely on the state benefits to top up my state pension!! THEREFORE THE TAXPAYER PAYS ALL THE COST OF THAT!!! YOU DON'T MENTION THE MPS WHO HAVE THE MOST GENEROUS PENSIONS OF ANYONE AND CAN RETIRE AT 55. I HAVE READ MANY ARTICLES ON LOVEMONEY OVER THE YEARS AND THIS IS UNBELIEVABLE IN ITS BIAS. THE AUTHOR SHOULD BE SACKED AND THAT IS "THE TRUTH".

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  • oldhenry
    Love rating 343
    oldhenry said

    The plain fact is that this article boosts the government hatred of public sector workers and conveniently lays the balme of them for the ills of the economy.

    The real culprits are those in successive governments that have robbed pension schemes and reduced the UK's capacity to provide meaningful employment but fllooded the country with migrants workers in an attempt to keep inflation down.

    It is a classic trick of diversionary tactics and sadly many , ignorant types, in the population have fallen for it. Well the way the government is going there will be little pension for anybody. Living standards are dropping now so they will be horrendous in twenty years time.

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  • nd
    Love rating 2
    nd said

    Most pensions in the private sector started off as "defined benefit schemes"-i.e-what the public sector gets currently.They have however over the last few decades changed to defined contribution-i.e-you get the spoils post the return on the money in ones pension pot.With stock market returns the way they are its no wonder private pensions have only gone down.

    The public sector employees seem to be going on about -"what they had signed upto"-well I have news for you-private sector employees did sign upto the same rights over the last 30 years -but most have lost them along the way.

    I work 2500 hrs in the year against the average public sector employee who works 1800 hrs.I still have to fund your pension and rely on the gods for my own.I have lost my job 6 times in the last decade.

    Please do get real and start paying up for what you get.

    ND

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  • nd
    Love rating 2
    nd said

    To add to then early comment-have not had a pay rise in 10 years...

    ND

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  • tadpole
    Love rating 6
    tadpole said

    I agree the Civil Services should pay more for their pensions.

    What a lot of people fail to realise that they pay towards their pensions in lower wages. Their pay rates are set in line with similar private jobs and then a deduction from the rate is made because of their good pension - it used to be about a 20 per cent deduction - I assume it is still about the same - so they are in fact paying about 21.5 per cent towards their pension! A reasonable figure I should think.

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  • harrykee
    Love rating 1
    harrykee said

    The article does sound biased, but there is nevertheless a fundamental truth. For years we have been talking about the "Pension Timebomb" where too many people are living longer and not enough people are working and paying tax to fund them. Well it has exploded!

    It is an unfortunate reality in British Politics that one party is profligate in creating jobs at the public expense and the other is miserly in cutting those jobs back. The politics of hatred and class division.

    Think about it, almost all money created in the UK goes direct to London. How do we get it out to Hull, Newcastle etc? Taxing the City of London and then employing public service workers in the North. That is a broken system, started by Maggie and her Union enemies resulting in an economy based too heavily on banking instead of manufacture and agriculture.

    It has to be dealt with.

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  • chuckbk
    Love rating 8
    chuckbk said

    The problem is that in a changing world final salary schemes, whether in the private or public sector, are unsustainable.

    If they had never been invented, what do you think the attitude of economists now would be if someone put forward the proposal? Madness! Ludicrous!

    It is unrealistic, and probably always was, to expect a government or company to promise to pay an undisclosed amount of pension to their employees at a date decades in the future whatever the state of the economy and investment returns over the intervening period.

    The risk with final salary schemes lies entirely with the provider and is not sustainable.

    With defined contribution schemes the employer plays their part by paying into the scheme but the risk lies with the employee which is the only way company pensions can remain viable in the future.

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  • nd
    Love rating 2
    nd said

    So if the public sector do not want to work longer or do not want to pay more into funding their pensions why don't we go back to a system of "reaping what you sow"-(like in the private sector)contribute what you like but accept the risk of the investment-at least this way the public sector will not feel ripped off.

    ND

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  • manchu
    Love rating 0
    manchu said

    As a retired public sector worker i do get a good pension. The NHS scheme to which i contributed for 40 years is i understand fully funded. In the years before i retired, however, the numbers of staff employed in the NHS increased dramatically and pay for many exploded too. The much higher final salaries of many high earning professionals means much higher pensions and this hasn't been funded. The problem stems from the abject failure of the last government to keep control of spending and their failure to recognise the pension consequences. At times over the last few decades under all governments staff have been encouraged to take early retirement with topped up pensions - many will live much longer in retirement than they spent contributing to their pensions. It isn't surprising that there is a looming funding problem - and it isn't the fault of individual NHS staff, it's the fault of government - civil servants as well as politicians.

    As for who works harder and longer there were long periods in my professional life when i worked between 5000 and 6000 hours a year. I've been retired for 6 years and am now just about learning to relax!

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  • nd
    Love rating 2
    nd said

    6000 hrs a year!-you do have a sense of humour

    working 365 days a year that would be 16.43 hrs a day

    working 6 days a week that would be 19.16 hrs a day

    working 5 days a week that would be 22.98 hrs a day

    working 5 days a week with 25 days of leave and 10 public holidays that would be 26.5 hrs a day.

    IThe strain of the hrs must have afected your memory.

    ND

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  • Basia02a
    Love rating 49
    Basia02a said

    The government should have started negotiations from the standpoint of a pay as you go as most private sector pensions are. This would have got a reacttion! I do believe that the benefits for past payments should not be changed but the new schemes should be much more realistic. To pay into a scheme perhaps for 30 years and then have the benefits changed is surely some sort of breach of contract. Are the Teachers fully funded, so there should be only minor changes there, perhaps to retirement ages.

    The good pensions used to be because public sector workers were paid so much worse, but now they are on average better paid. There is also scope to reduce the pension relief further for the better off. Those execs who have had 50% pay rises this year.

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  • harrykee
    Love rating 1
    harrykee said

    Whilst agreeing with much of Trav1's comment, there is one obvious omission.

    One of Gordon Brown's first actions was to remove the Tax benefits enjoyed by pension funds. This ruined the performance of many pension funds in the private sector so it has already been fleeced!

    We nearly all accept that endowment policies were a bad thing. Underperforming, high risk things. The trouble is that a private sector pension fund is almost exactly the same animal, except the benefits are paid out as income rather than lump sums.

    True, the banks did precipitate the crisis, but the Government of the day should not have borrowed such mad amounts, leaving us broke when the crisis occurred

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  • edwardmk2879
    Love rating 65
    edwardmk2879 said

    To Manchu,

    There are only 8760 hours in a year. You spent your entire life working with no recreation, or perhaps only need five hours sleep per night. I hope you have a most enjoyable retirement, blessed with good health. Sounds like you earned it.

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  • OorWullie
    Love rating 38
    OorWullie said

    Interesting that the police, fire services, GPs, and a few others were omitted in this calculation. Not so long ago many pensions could not be transferred whenever one changed jobs (and even within LA & CS departments) which penalised many and who are still suffering the consequences. The CS salaries were based on a 6% pension contribution and while it seemed that CS had a non-contributory scheme the reality was that the 6% was taken into consideration in their salary structure. In order to make-up for this loss (mentioned above) the top-up scheme was introduced and, in total, in my latter years in harness, I contributed 22% of my salary yet still failed to qualify for a full-pension. The pension scheme in operation into which I contributed guaranteed to maintain the value of pension after retirement, that was until Margaret Thatcher's government altered the indexation-linkage in 1982 and since pensions (all State pensions) have been on a yearly depreciation yet few voices have been raised in opposition to this. This present government has improved the situation slightly but nothing more; pensions are still on a yearly devaluation and contrary to the hype touted about how well provided pensioners are and especially CS pensioners, the reality is that on retirement 24 years ago I had a livable income but today, owing to this depreciation feature, I am struggling to survive. While the average age of the population is increasing why then have all those of whom I knew of my generation passed on and what about the contributions they made to their pensions from which they never fully benefited? There are too many factors being ignored in this calculation which is also typical of the Hutton Report. Margaret Thatcher on offering early retirement and some with golden handshakes simply to reduce the unemployment numbers plundered the pension funds which started the rot which is now being felt today. The fault is hers; Tony Blair choose to ignore this anomaly and hence this state of affairs. Furthermore, CEOs in private industries were given massive pay rises during their last year in office to enable them to retire on full-pay pension which is banditry. It is too easy to forget.

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  • tsykes
    Love rating 6
    tsykes said

    What many in the public sector don't realise (or choose to ignore) is that over the last 10 years there has been a quiet revolution in private sector pensions. We have all had to pay more, work longer and get less. Reason it has been quiet is that everyone can see the funding gap and employees and employers have worked together to address it. I guess the noise from the public sector is because there is no fund so it is not so obvious that there is a gap.

    When Caketh54 suggests that private sector workers should be fighting for better pensions it is missing the point - anyone can have any pension they like but it has to be paid for - I guess that public sector workers are not offering to chip in so it is either the employee or the employer, neither can afford it right now..... (especially if our taxes are rising to pay for other peoples pensions!!)

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  • electricblue
    Love rating 769
    electricblue said

    If the quality of prose exhibited above is indicative of the level of literary prowess expected of a university administrator, I would suggest that the author of this article is somewhere down the line in those who should be sacked.

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  • Trixielooloobell
    Love rating 7
    Trixielooloobell said

    I am rather baffled as to why the Con-Dems are so keen to point public loathing at public sector workers, surely they are all part of the same "team"?

    I used to work in the public sector and I contributed 4% of my salary to the pension and the local authority contributed around 7% if my memory serves me rightly. My pay whilst in the public sector was around half of what I now earn in the private sector and I currently contribute 5% of my salary whilst my employer contributes 10%. I am far better off in the private sector and can also enjoy bonuses and better cost of living increases.

    That being said I am just on the verge of leaving my private sector job with the aim of getting back into front line work with local authority. The trade off for poorer salaries and higher realistic stress levels (I'm sorry I don't actually give a fig about lining the pockets of greedy over paid executives in the private sector, working on the front line trying to make a positive difference to those people on the margins of society is far more worthwhile and offers better community gain in the long run) and generally poorer working conditions is that there is a fair pension scheme reflecting years of devotion to the public cause.

    When will the private/ public sector conflict be dropped in favour of pressing the financial sector to stop giving out vulgar bonuses and "legally" dodging taxes?

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  • nickpike
    Love rating 308
    nickpike said

    I have to pay 3 (yes, THREE) pensions. My own, 25% rates for local government and taxes for the rest of government and Civil Service.

    I have to be paid from a fund. The public sector has no fund. They should stop paying pensions until they have built a fund, in many years from now.

    Why is the system so unfair??????

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  • disbeliever
    Love rating 10
    disbeliever said

    In the above posts, I have seen no mention of the "accrual rate", i.e.,to what percentage of final salary do the contributions entitle the employee at retirement? Many public sector employees are on an accrual rate of 1/80th, which is hardly generous. Many private sector employers introduced final salary schemes in the 1970's. They were introduced so that the employees could be contracted out of the State Earnings Related Pension Scheme. During the boom years of the stock market, many employers took "contribution holidays", when they paid nothing, but the employees continued to pay into the schemes. When the stock market had a bad run, many schemes were underfunded, and now employers want to close them. I wonder if the present rush to close pension schemes is designed to force employees into the dubious clutches of the Financial Services Sector. Remember them :- they gave you endowment mortgages, Payment Protection Insurance and the taxpayer funded bailout of greedy incompetent bankers. Is this the prelude to their latest scam?

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  • Ed Bowsher
    Love rating 80
    Ed Bowsher said

    Hello everyone,

    Just to reassure Salfordguy on one point. We will be publishing a piece on MPs pensions later this month.

    Regards,

    Ed

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  • ramehead
    Love rating 1
    ramehead said

    As a retired teacher I'm still smarting at this wonderful coalitions' retrospective fiddling with my agreed pension payouts.Their interpretation of the annual cost of living increase is surprisingly always less than it should be with it now linked to CPI instead of the RPI. Interesting that they still have theirs tied into RPI! By the way what are their contributions?

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  • serafina43
    Love rating 1
    serafina43 said

    This is a poor article that reveals nothing useful! Who on earth imagines judges to be typical representatives of public sector workers!? It's people like teachers, nurses firemen and dustmen who keep society functioning - why is there such resentment that they should receive a (in some cases) decent pension when many have very low wages?

    It is a pity that articles such as this help to fuel a completely unnecessary antagonism between public and private sector workers.

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  • chuckbk
    Love rating 8
    chuckbk said

    Amazing how the subject of bankers bonuses always comes up on any discusson on any financial site.

    Not sure of the connection between their bonuses and the affordabilty or otherwise of final salary pension schemes.

    If bank bonuses and MP's pensions are curbed, will the public sector unions and their members stop their opposition to the changes? I doubt it and, if not, are these two subjects not just a red herring cooked up by those who can't find a genuine arguement for maintaining the status quo?

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  • ECLKWRIG
    Love rating 33
    ECLKWRIG said

    I never cease to be amazed by the fact that posters such as "nd" naively believe the hogwash they are bombarded with in their newspapers (comics ?) about public sector pensions. For nd's education: local government staff actually pay into their pension; you do not "fund" my pension. if you wish to vent your prejudice in public forums, at least get your facts right !

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  • philipwalduck
    Love rating 3
    philipwalduck said

    My mother who never had a pension scheme as she never worked for a company long enough to fund a pension retired ten years ago. I never discussed with her the pension however I recenlty discovered that my mothers pension was actually HIGHER than what I earn as a full time worker. Also the people within the public sector doing exactly the same job as myself currently earn between 6 and 49% more than what I do for the same job! Can somebody explain that one

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  • mosicle
    Love rating 21
    mosicle said

    these pensions aren't really that good!! It's a big slice of your pay, when your pay is a pittance.My husband worked for 47 years in civil service and as an HEO earned less than my daughter did as a secretary. When pay was negotiated, government used to use poor pay rises as the reason the pension contributions were smallish!!!. Now they are trying to turn the country against the civil servants who do "THEIR" bidding, the targets that they are given are unreasonable, the goal posts are moved regularly and the appraisel levels were fiddled by the management on government instructions so that staff could not possibly get a top award towards a payrise. The public do not realise the dirty tricks that the government pull on their own staff, if they did maybe just maybe the public would give them a little more respect.

    Report on 15 December 2011  |  Love thisLove  0 loves
  • franknstein
    Love rating 1
    franknstein said

    You don't acknowledge the bigger picture D'Arcy. You certainly don't acknowledge Local Government pension schemes or have you lumped that in with the Civil Service? We live in an immensely prosperous society which apparently can afford to conduct wars half-way round the world and which continues to fund a minority of its members with vastly disproportionate salaries and rewards. You know who they are - incompetent bank CEOs. corrupt MPs and MEPs, irresponsible sportsmen, immoral hacks and specious celebrities. But you choose the easy target, Mr D'Arcy - like a Daily Mail reporter - seemingly envious of the pittance-paid public employee - without whom the fabric of this country would collapse. You divide low-paid private sector employees and low-paid public sector employees by this facile argument, instead of pointing the finger at the huge and growing income gap between rich and poor and those who further it. If you want to live in the kind of society where it's every man, woman and child for themself then go and live in the States and see where free-market economics leaves you.

    Report on 16 December 2011  |  Love thisLove  1 love
  • Chorlton1
    Love rating 61
    Chorlton1 said

    I thought the arguement about salaries being lower in the public sector had been dispelled as a myth in most cases perhaps to balance things up another article could look at this issue.

    Report on 16 December 2011  |  Love thisLove  0 loves
  • jchapman1964
    Love rating 1
    jchapman1964 said

    Must be an ex Daily Mail reporter. What a one-sided load of rubbish. Lovemoney should be ashamed to allow this biased text to be on their website. I'd suggest you review all pensions,. and not just cherry pick those that will give you the most sensational impact. While you're at it, make sure you do some comparisons of pay between public and private sectors, covering the whole range of personnel. Disappointed.

    Report on 17 December 2011  |  Love thisLove  1 love
  • royston
    Love rating 1
    royston said

    Very disappointed with this. Generally disappointed with lovemoney.com in 2011.

    Report on 19 December 2011  |  Love thisLove  1 love
  • supernova9
    Love rating 1
    supernova9 said

    What an absolute load of one-sided rubbish. Even your contributions table is shockingly one sided. Well done for ignoring workers such as Firefighters who pay 11.5% of salary into their pension schemes.

    Yet another journalistic attempt at putting public sector and private sector up against each other and fostering resentment between the two.

    Report on 20 December 2011  |  Love thisLove  1 love
  • yocoxy
    Love rating 152
    yocoxy said

    Strange how the publication of some facts creates such vitriole.

    I've been in three private sector pensions which have ended their final salary schemes because they are UNAFFORDABLE. The real problem is that the Public sector has never been run like a private company, it's always had the underlying ethos that if they overspend, more tax money will be forthcoming.. Private companies go bankrupt at that stage.

    Let me say that again, final salary schemes are unaffordable unless employees are prepared to pay significantly more and work significantly longer. The private sector workers have had to accept that, but the public sector believes it can just go back to the Government for a bigger cheque to cover the shortfall.

    Get real.

    Oh and unpalatable facts does not automatically mean poor journalism. The truth is tough sometimes isn't it? Welcome to the real world.

    Report on 22 December 2011  |  Love thisLove  0 loves
  • ECLKWRIG
    Love rating 33
    ECLKWRIG said

    I have no difficulties with truthful and full journalism; what I do find unpalatable and unforgiveable is selective, some might say dishonest by omission, reporting. No mention is made in the article about contributors to the Local Government Pension Scheme (LGPS) who have already been forced to endure major changes, despite the fact that their pensions fund is deemed to be financially viable as it is; so why attack us again ? You should be applauding LGPS contributors for having already accepted that change was necessary 5 years ago, not applauding the inflicting of yet more misery on them; shame on you. Remember, public sector workers have to pay out of their own pockets for their work Xmas parties (as I remembered to my own considerable cost last Friday), we do not enjoy Xmas bonuses, we do not receive subsidised shares issues et.c. THAT's the "real world".

    Report on 22 December 2011  |  Love thisLove  1 love
  • The Bank Manager
    Love rating 79
    The Bank Manager said

    ECLKWRIG. I find it difficult to feel too sorry for you, as I've just paid in full for my own Xmas do, I make contributions to my Money Purchase pension scheme and I've not received any cheap share options in lord knows how many years (who'd want them in my sector any way!) and the last time my colleagues and I received a bonus from Scrooge Bank plc, the year started with a '19' and we are now in 2011!

    How many other workers, who bust a gut to serve the public in so many other ways, get much of what you get? How many holidays do you get a year compared to some person working in a small local store?

    Naaahhh, I feel little sorrow for you, you still have it good and I don't deny that I have it good too.

    Times have changed and I recognise that to keep my job and bring home the few quid to keep my family afloat, I have to change with it and accept that to fight it, could cost me that job and then where would I be? GET REAL.....

    Report on 23 December 2011  |  Love thisLove  0 loves
  • Popparillo
    Love rating 2
    Popparillo said

    I'm not sure what qualifies Cliff D'Arcy to write about pensions. As some commenters have already pointed out, this is an incredibly poorly researched article, and contributes nothing to the debate on pensions. I imagine Mr D'Arcy has just rehashed a few articles he has read in a couple of right wing papers.

    if this is a balanced article, why are all public sector pensions dexcribed as gold plated? Its so depressing to keep reading artcles like this, devoid of any objectivity or attempts to offer constructive solutions. I note that the Local Government Pension Scheme(LGPS) is not mentioned. This is because the LGPS is a fully funded scheme. If no-one paid any more into the LGPS, it would be able to meet all its liabilities for the next 20 years, but of course that doesn't fit Mr D'Arcy's agenda.

    The future cost of pensions is a real issue, but not one that will be solved by making pension contributions unaffordable for hundreds of thousands of low paid workers. There are not many in the public sector who would argue against raising the pension age, but increasing contributions by 3.2% which has been suggested would see many people leaving such schemes. People without a pension, or with very bad pensions are just going to be a drain on the state when they do retire.

    Its sad that so many people seek to cause division in society and pit private and public sectors against each other. The public sector is often portrayed as a millstone around the country's neck, but the public sector is the country. Its the infrastructure of the country, and its what allows the private sector to operate, and thrive in better times. Without it we'd be living in caves and continually fighting each other over scarce resources.

    Report on 27 December 2011  |  Love thisLove  2 loves
  • st clair
    Love rating 0
    st clair said

    Why cant the public sector stop whinging and provide their own pension? Very few in the private sector enjoy the huge employer/taxpayer subsidies the public sector get - even post-so called reform.

    In my extended family - 7 of us - only one is in a final salary scheme. And that person works for the taxpayer supported RBS - the rest of us have to provide for ourselves.

    Report on 27 December 2011  |  Love thisLove  0 loves
  • Heledd
    Love rating 2
    Heledd said

    Who'd have thought, during the supposed season of goodwill to all, that I'd be reading such an offensive headline and such a vitriolic attack on public sector workers? Even as someone who works in the private sector I find this "article" the inane, biased ramblings of the author. What ever happened to Lovemoney's balanced reporting style I wonder? My only New Year's resolution for 2012 will be to cancel my subscription, I'm sure I can survive without reading this type of banality.

    Report on 29 December 2011  |  Love thisLove  0 loves
  • chuckbk
    Love rating 8
    chuckbk said

    Why so many attacks on the author?

    The facts quoted are either right or wrong - if wrong then perhaps posters would be better off stating where they are in error rather than just complaining that they believe the story is biased.

    Otherwise one may be left feeling that the detractors are the ones suffering from bias.

    Report on 29 December 2011  |  Love thisLove  0 loves
  • ECLKWRIG
    Love rating 33
    ECLKWRIG said

    @TheBankManager' - for your information, nobody is seeking your "sorrow"; what you have to take on board are the facts and not the mis-placed, envious side-long glances from the private sector to the public sector, fuelled by misinformation and ignorance. You clearly don't know (or have elected to forget) that members of the Local Government Pension Scheme did indeed face up to the reality and accept that change was necessary, 5 years ago and sacrificed a lot to maintain some semblance of a pension scheme - now we have a pension scheme that is financially sound and is not a burden on the 'tax payer' (aren't we tax payers too ?); why are we therefore expected to bear the cost of the measures necessary to deal with the horrendous mistakes and errors of judgment propagated by mass incompetence in the sector within which you are employed ?

    Report on 05 January 2012  |  Love thisLove  1 love
  • Poostix
    Love rating 9
    Poostix said

    What utter rubbish...... not what the author is saying but the reams and reams of complaining about it.

    Public sector workers are not on a lower wage than private sector. The private sector in most cases does a good days work for fair pay. Their employer does not put back into the "pot" where as the private sector provides all of the income for the public sector to be able to work.

    I train people in my private sector job which I have been training for almost 10 years I earn around the £22K mark, a newly qualified teacher earns more than me, and then gets increases per year well in excess of mine quickly earning around £30-£35K

    I have a friend that works in refuse at my site he earns about the same as me a bin man earns over £450 a week which puts him on around £25K.

    Our admin assistant earns £12K a year where her friend that does pretty much the same job in the new CSA earns £18K.

    I think the public sector workers should come and work in the private sector for a while and see if they can manage on these wages while paying into a private pension scheme.

    The only reason I mention this is because everyone I've seen complaining on the news has stated that because they receive poor wages they should get good pensions????

    The only people I really feel sorry for are the armed forces, a friend of mine has been a fireman in the army for over 5 years, he's based in the UK and he's on around £16K where a fireman in real life stars on £28K and is quickly up to £32-36K yet when they go on strike who is called in to cover their jobs???? my mate on half the wage.

    Suck it up and stop complaining or move into the private sector for your "better" pay.

    Report on 05 January 2012  |  Love thisLove  0 loves
  • ECLKWRIG
    Love rating 33
    ECLKWRIG said

    'Poostix' you know what the strange or funny thing is ............................?

    The people you purport to "really feel sorry for" do not contribute to their pension schemes; these are paid for, in their entirety by the tax-payer. Fire personnel pay a whopping 11% of salary towards their pension.

    Just because you know of people who are not sufficiently well rewarded in the private sector does not give you carte blanche to wish or inflict similar misery on to those who work in the public sector. Show some respect.

    Report on 05 January 2012  |  Love thisLove  1 love
  • hobhoid
    Love rating 0
    hobhoid said

    As always in these cases, it a race to the bottom.

    If everything is so cushty in the public sector then feel free to apply for a job there as its open to everyone. There is a reason why people choose te priv sect- MONEY.

    Let me put you straight on a few thigs poostix.

    1. Army firefighters start as soldiers.

    2.Their living costs while on tour are free.

    3. They dont contribute to thier pensions.

    4 I totally agree that they dont get payed enough, to me they are the most deserving public sect workers.

    I am a firefighter(non military). A firefighter starts today on around £2200. They have 16 weeks of training and assesment. They have ongoing work and assesment in their 1st 2 probationary years of service.

    Only after passing all of that, the salary goes upto £28000 for a 42 hour week.

    It does not exeed that amount!

    As mentioned above we pay £260 per month towards our pensions(11%).

    I come out with £400 a week. Less than £10 an hour.

    We work unsociable hours, missing xmas, birthdays etc.

    There is no bonus scheme.

    The perks if you like are the job itself, conditions, security, etc.

    I am assesed several times a year buy way of written and practical examination to prove i can do my job( even airline pilots only get one every 6 months).

    I agree that there are unessesary public sector jobs as some people see it as a license to write checks.

    Its a government tactic to set one against the other, ie. public v private. You find yourself arguuing with your mates, it puts the pressure on to back down, its all a ploy and masks the real problems below.

    Interesting statisic is the Uk benefits bill can no longer be afforded by the entire contributions of the Uk tax payer, doesnt take a genius to work out why we are in such a mess.

    Feel free to post a reply.

    Report on 07 January 2012  |  Love thisLove  0 loves

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